Deemed transfer under section 2(47)(v) fails where a development agreement lacks section 53A conditions and readiness to perform.

A joint development agreement is a deemed transfer under section 2(47)(v) only if it satisfies section 53A of the Transfer of Property Act, including possession in part performance and the transferee's readiness and willingness to perform. Here, the agreement described the developer's possession as permissive, the developer had not substantially performed its obligations, approvals were not obtained, and only a refundable deposit had been received. On those facts, section 2(47)(v) could not be invoked, and capital gains were not taxable in assessment year 2010-11.

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Issues: Whether capital gains arising from the joint development agreement were chargeable in the assessment year 2010-11 by treating the agreement as a transfer under section 2(47)(v) of the Income-tax Act, 1961.

Analysis: The joint development agreement expressly described the possession granted to the developer as permissive possession and stated that it was not given in part performance or as delivery of possession under section 53A of the Transfer of Property Act, 1882. The determining requirement for section 2(47)(v) is that the transaction must fall within the nature of part performance under section 53A, including a written contract, transfer for consideration, possession in part performance, and the transferee's readiness and willingness to perform. The record showed that the developer had not performed the contractual obligations in the relevant year, no meaningful development had taken place, the necessary approvals had not been obtained, and the assessee had received only a refundable deposit. The authority relied on the principle that a development agreement does not by itself create a transfer unless the statutory ingredients of section 53A are satisfied.

Conclusion: Section 2(47)(v) could not be invoked to tax capital gains in assessment year 2010-11 on the facts of this case, and the addition was not sustainable for that year.

Ratio Decidendi: A joint development agreement results in a deemed transfer under section 2(47)(v) only when it satisfies the statutory ingredients of section 53A of the Transfer of Property Act, 1882, including the transferee's readiness and willingness to perform and possession in part performance; absent those conditions, capital gains cannot be taxed in the year of the agreement.

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